Wednesday, September 17, 2008
Sept. 17 (Bloomberg) — Goldman Sachs Group Inc. and Morgan Stanley, the two biggest U.S. securities firms, tumbled the most ever in New York after a government rescue plan for American International Group Inc. failed to ease the credit contraction.
Goldman fell as much as 23 percent on the New York Stock Exchange and Morgan Stanley plunged 44 percent, leading financial stocks to the lowest level in five years.
Morgan Stanley Chief Executive Officer John Mack and Goldman’s Lloyd Blankfein are trying to navigate declining investor confidence that prompted emergency sales of Merrill Lynch & Co. and Bear Stearns Cos. and the bankruptcy of 158- year-old Lehman Brothers Holdings Inc. The turmoil spurred the U.S. government late yesterday to lend as much as $85 billion to AIG to prevent the insurer’s collapse.
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Markets are reacting to “rumor and fear,” Colm Kelleher, Morgan Stanley’s finance chief, said yesterday after the New York-based company reported better-than-estimated earnings for the third quarter.
This article was posted: Wednesday, September 17, 2008 at 10:46 am